I'm not sure if you're like me, but wherever I go, always know where the exits. It may be because I'm usually with young children to me, but I think it is always vital to know where to go in case of emergency. You don't need to understand that hot right now.
The same hold true in negotiations; you need to know where's trade or system exit before you trade.
Why is this important? it is amazing how stress and anxiety when you're in the moment, can cause you a terrible decision. Probably a decision, which was was calm, I never would have made.
Will give you an example: I am a trader who spent approximately 2 months examining a trading system before he subscribed. Reviewed professions, spoke with the developer, ran calculations-almost everything he had to make to feel confidence in the commercial approach. Did everything, except for determining when this will stop the trading scheme.
Thus, he subscribed, and during the first week, the commercial approach had two major losing trades.Big, Yes, but also within the historical performance of the system shock who were two very simple.Of course, the trader Panicked, and annulled the record after these two professions.
I staked you can guess what happened then Yes ... the system recovered from those trades next week, and continued to perform very well, as expected.However, the trader, did you get to participate in recovery.
The same idea applies to any given trade; If you do not have a constant exit point in mind, or better yet, put on the market, chances are you'll be able to avoid a judgment that enables your closing position against, but you will have to act, and probably at the worst possible moment.
I say often that emotions are often more important to trading rules, entry and exit. letting you emotions dictate when to quit is an equity killing way to trade.
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